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Mobile booking penetration to skyrocket to 77% in China by 2020

10/20/2017|9:07:09 AM|Phocuswright

China had already achieved 40% mobile booking penetration (MBP) by 2015. It now stands at 59% and is expected to climb to a dizzying 77% by 2020, far outpacing the rest of the world.

Mobile booking penetration (MBP) – the share of online gross bookings made via mobile devices – is growing rapidly everywhere. In this shifting space, it is critical for travel sellers of all stripes to understand where their audience prefers to book and how that preference is evolving. While the U.S. and most countries in Europe are seeing promising growth in MBP, China is setting the bar – and setting it high.

China had already achieved 40% MBP by 2015. It now stands at 59% and is expected to climb to a dizzying 77% by 2020, far outpacing the rest of the world. The U.S. currently lags at 22%, and is expected to reach just 30% by 2020 – ahead of only France among key developed countries, and less than half of China's expected MBP.

What accounts for China's large lead in MBP over the rest of the world? First, it's sheer numbers: China now hosts over 1 billion mobile subscribers, the majority of them on smartphones. In India (which also has a large population of mobile subscribers), the majority of consumers only have access to basic mobile devices, which contributes to a relatively low MBP. Because broadband Internet and affordable PCs arrived relatively late in China, many Chinese never owned a desktop or laptop computer; the smartphone was their first device, making them smartphone natives who are much more likely to embrace mobile e-commerce.

This environment fostered the popularity of WeChat, the world's most advanced mobile messaging and commerce platform, which many Chinese use for daily tasks including messaging, making utility payments and ordering food delivery. While the share of travel bookings taking place within WeChat is relatively small, the ubiquity and widespread use of WeChat Wallet and Alibaba's Alipay are helping Chinese travelers become much more comfortable making large purchases on their phones than the rest of the world. In addition, Chinese OTAs Ctrip, eLong and Qunar have successfully enticed travelers to book on mobile with deep discounts and a smooth booking experience.